Bear Mountain Bull

It’s time again for a little BMB R&R, especially with the market behaving as bizarrely as it’s been. Maybe if we stop watching it start to behave a little better…

Posting will be very light and variable over the course of this week, but we’ll put up an open thread each market day for our readers to comment on the day’s market activity or to post any interesting links they might run across.

Check the space below for whatever the latest might be during this ‘off’ time, and please visit the various sites in the ‘Links’ and ‘Regular Stops’ for up-to-date market news and analysis.

BMB will be back in full swing by next weekend.

You haven’t heard much gushing about the ’strong’ dollar lately - perhaps because it hasn’t been as strong. And right now it looks as though the good ol’ dollar is contemplating another dive. The sharp uptrend from May has clearly been broken, and attempts to make new highs in the dollar index have failed twice in July. Now we find the dollar testing support at the 88-89 level for the third time in less than a month, having broken through its 20-day moving average - which is turning down - and then testing the 50-day over the past two sessions. It just so happens that this area is also marked by the uptrend off the March lows. A fall beneath this area could pull the rug out from under the buck, and a floor of real support doesn’t show up until down around 84.

Chart courtesy of StockCharts.com

Just when you thought some of the semis might be looking to top out, along comes Maxim with earnings and BAM! Shares of MXIM shot up more than 8% today and took a lot of other names in the sector along for the ride. The amazing thing is that I don’t think their earnings were all that great, but they maintained an optimistic outlook. In this market, it doesn’t take much.

Chart courtesy of StockCharts.com

The market put together another strong session today, despite a record high closing price on crude oil. The Dow Industrials got back 61 points (+0.6%) to 10683. The S&P 500 gained 9 points (+0.7%) to 1244, and the Nasdaq was again the leader, plowing through 2200 with a gain of 23 points (+1.0%) to 2218. The Russell 2000 logged another new all-time high at 689, a gain of 6 points (+0.8%). The Dow Transports labored a bit, gaining only 0.2%, but the Utilities rebounded for a 2.5% gain. Bond yields held pretty steady, with the 5-year at 4.16% and the 10-year at 4.33%.

Market internals were again quite strong, and volume picked up to pretty healthy levels. Advances/declines were nearly 2/1 on the NYSE and better than 5/4 on the Nasdaq, with up/down volume better than 2/1 on both exchanges. New highs/lows were 391/17 on the NYSE and 207/19 on the Nasdaq.

Only one group posted significant losses on the day, that being the airlines which fell 1.4%. On the up side, there was a lot to see: steel stocks (+3.4%), semiconductors (+2.5%), oil services (+2.2%), utilities (+2.2%), natural gas stocks (+1.8%), natural resources (+1.7%), commodities (+1.4%), computer tech. (+1.4%), gold & silver (+1.4%), broker/dealers (+1.3%), oil stocks (+1.2%), internets (+1.2%), hospitals (+1.2%), HMOs (+1.0%) and insurers (+1.0%). Whew.

Crude oil pushed to a new all-time high close at $61.89/barrel, up 32 cents from yesterday. The dollar index was nearly unchanged at 88.75, and the price of gold held near $432/ounce.

Still no signs of weakness in this market. How long this can keep going is anyone’s guess.

The market started out on a good note, with all the major indices in positive territory. The leaders out of the gate are the steel stocks (on an upgrade), semiconductors, oil services, natural gas stocks, and utilities.